ORDER OF PRECEDENCE WHEN DECIDING ALLOWABILITY OF COST Legislation Program Regulations EDGAR (Incorporates OMB A-21 Cost Principles for Educational Institutions) Approved Application
ALLOWABLE COSTS (USE OF FUNDS) Legislation – Section 323 of Higher Education Act of 1965 as amended U.S. Code 1060 Part B, Historically Black Colleges & Universities
ALLOWABLE COSTS Section 323 (a) General Authorization: Use of funds –Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instruction and research purposes. –Construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional facilities including purchase or rental of telecommunications technology equipment or services.
Allowable Costs (Sec. 323 continued) –Support faculty exchanges, and faculty development and faculty fellowships to assist in attaining advanced degrees in their field of instruction. –Academic instruction in disciplines in which African Americans are underrepresented. –Purchase of library books, periodicals, microfilm, and other educational materials, including telecommunications program materials. –Tutoring, counseling, and student service programs designed to improve academic success.
Allowable Costs (Sec. 323 continued) –Funds and administrative management, and acquisition of equipment for use in strengthening funds management. –Joint use of facilities, such as laboratories and libraries. –Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector. –Establishing or enhancing a program of teacher education designed to qualify students to teach in a public elementary or secondary school that shall include, as part of such program, preparation for teacher certification.
Allowable Costs (Sec. 323 continued) –Establishing community outreach programs which will encourage elementary and secondary students to develop the academic skills and the interest to pursue postsecondary education. –Establishing or improving an endowment fund. –OTHER ACTIVITIES submitted pursuant to section 323 that: 1.contribute to carrying out the purpose of this part; and 2.are approved by the Secretary as part of the review and acceptance of such application
EDGAR REQUIREMENTS EDUCATION GENERAL ADMINISTRATIVE REGULATIONS (EDGAR) SECTION 72.27 ALLOWABLE COST –Incorporates OMB Circular A-21, Major Cost Principles for Educational Institutions
ALLOWABLE & UNALLOWABLE COSTS OMB Circular A-21 Objective Provides clear cut guidance on all expenditures: allowable, allocable, reasonable, and prudent.
OMB A-21 COST PRINCIPLES Purpose –Establishing principles for determining costs applicable to grants, contracts, and other agreements with educational institutions.
OMB A-21 COST PRINCIPLES Applicability –All federal agencies that sponsor research and development and other work at educational institutions shall apply the provisions of this Circular in determining costs incurred for such work.
OMB A-21 COST PRINCIPLES TABLE OF CONTENTS A.Purpose and Scope B.Definition of Terms C.Basic Considerations D.Direct Costs E.Indirect Costs F.Identification and assignment of indirect costs
OMB A-21 COST PRINCIPLES TABLE OF CONTENTS (Continued) G.Determination & Application of Indirect Cost Rate or Rates H. Simplified Method for Small Institutions I.Reserved J.General Provisions for Selected Items of Costs K.Certification of Changes
FIRST LEVEL DETERMINATION OF ALLOWABLE COST IN OMB A-21 ALLOCABLE TO THE GRANT –Benefits received REASONABLE –Necessary for the operation ALLOWABLE –Circular, law, local regulation PRUDENT –Comparability with use of institutional funds
UNALLOWABLE COSTS OMB Circular A-21, Section J –Alcoholic Beverages –Communications (i.e. line charges, unit charges) –Donations & Contributions –Entertainment (i.e. anything remotely related) –Executive Lobbying (i.e. attempting to improperly influence the decisions of officers or employees of the Federal Government)
UNALLOWABLE COSTS (Continued) –Exclusive Memberships, Subscriptions & Professional Activity (i.e. Country Clubs) –Pre-agreement Costs (Unallowable unless pre-approved) –Scholarships & Student Aid
INDIRECT COSTS ARE NOT ALLOWABLE IN THE TITLE III PROGRAM
THINGS TO REMEMBER TO DETERMINE IF A COST IS ALLOWABLE OR UNALLOWABLE, CHECK THE FOLLOWING SOURCES: The Law Program Regulations EDGAR, 34 CFR 74.27 Allowable Costs OMB Circular 21 Approved Application
ACCOUNTABILITY GPRA – 1993 –Government Performance and Results Act –Ties federal funding to results –Greater accountability »GPRA indicators reflected in objectives and activities »Include milestones in objectives to determine success accurately
DRAWDOWN POLICY Request funds for immediate needs Minimize time between requests & expenditures (72 HOURS) Rate of draw downs commensurate with approved scope & milestones
DOE CONCERNS Large amounts of unobligated funds Excessive or infrequent requests Project goals/objectives not met – DOE monitors –Student population is not being served as proposal objectives indicates –Maybe, HBCU’s DON’T NEED THE MONEY
GAPS MONITORING OF AVAILABLE BALANCES Within 90 days, “flags” grants with 70% or more of funds remaining Verifies financial data reported on annual performance report
PART II: TITLE III PROGRAM ADMINISTRATION AND MANAGEMENT
ELEMENTS OF AN EXEMPLARY TITLE III PROJECT ADMINISTRATION PROGRAM RESPONSIBILITIES OF A TITLE III PROJECT DIRECTOR A.Provide leadership and coordination B.Facilitate integration of Title III activities
C.Support an ongoing process of institutional effectiveness D.Develop and update a project handbook to include policies and procedures E.Monitor expenditures and reconcile monthly F.Ensure conduct of an annual external evaluation RESPONSIBILITIES (Cont.)
G.Ensure that Title III funds are disbursed in keeping with: Education Departments General and Administrative Regulations (EDGAR) (Revised June 23, 2005); A-110 (Revised April 25, 2007); OMB Circular A-21 (revised May 10, 2004); and A-133 (revised June 27, 2003). RESPONSIBILITIES (Cont.)
Roles and Responsibilities of Title III Activity Directors
The Title III Activity Director is responsible for…. 1.Activity management and oversight 2.Implementation of objectives 3.Supervision and monitoring of activity staff 4.Reporting activity status/progress 5.Approval and processing of requisition 6.Keeping abreast of grant regs & information 7.Maintaining up-to-date activity files 8.Maintaining up-to-date equipment inventory
Roles and Responsibilities of Title III Activity Director (Cont.) 1.Budget Monitoring and Oversight 2.Staff meeting attendance 3.Approval of travel requests 4.Preparation and submission of annual plan of operation 5.Documentation of objective implementation 6.Preparation for and participation in internal and external Title III activity evaluation, site review, etc.
MAJOR COMPLIANCE PROVISIONS A.EDGAR 1.Property Controls 2.Prior Approval Requirements 3.Notification of Change in Key Personnel 4.Annual Evaluations of Performance
B.OMB Circular A-110 1.Available over the Internet at http://www.whitehouse.gov/omb/circulars/a110_co mpliance/06/pt3.pdf http://www.whitehouse.gov/omb/circulars/a110_co mpliance/06/pt3.pdf 2.An institution cannot hold excess cash on hand. (Funds to be spent in 72 HOURS) 3.A-110 also describes “Davis-Bacon” compliance requirements.
C.OMB CIRCULAR A-21 The Cost Principles As a reminder, follow four guidelines ALLOWABLE ALLOCABLE REASONABLE PRUDENT
OMB CIRCULAR A-133/THE SINGLE AUDIT REQUIREMENT A-133 single audit requirement pertains to all federal grants which exceed $500,000. A- 133 auditing defines institutions as: Low-Risk or High Risk
D.OMB CIRCULAR A-133/The Single Audit Requirements 1.A system of checks and balances 2.Proof of written policies and procedures 3.Property Control Management
OMB CIRCULAR A-133/The Single Audit Requirements (cont.) 4.A review of all reports filed The Financial Transactions (the 269s; 272s); Performance Reports; Annual Audit must be filed with the Federal Audit Clearinghouse (which must include any corrective action plans prepared by the institution)
5.Proof of compliance with the Davis-Bacon Act. 6.Proof that all Expenditures Constitute Allowable Costs. OMB CIRCULAR A-133/The Single Audit Requirements (cont.)
PART III MONITORING BEGINS WITH MEASURABLE OBJECTIVES
Writing Measurable Objectives There are many formats for writing objectives. During this workshop we will use the National Laboratory for Higher Education (NLHE) format and content.
A well written objective should take the form of a single statement that contains the following: 1.QUANTIFIED OUTCOME –State the projected end result in measurable terms
A well written objective should also include…. 2.Time –Specify the date that the objective will be completed.
The following are optional parts of an objective: A.Responsibility: State what person(s) or unit is/are responsible for implementing the objective. B.Conditions: Specify special conditions (if any) that will or may impact that outcome of the objective.
Many grants, such as the Title III Grant, require each objective to have an anticipated result. The anticipated result statement should include… Performance Level and Baseline Data Evaluation Method(s) Date(s) Type and Location of Documentation
MONITORING The Ongoing Review of Activities to Manage Performance Title III Activity Timetable Internal Monitoring of Progress Monthly Time and Effort Reports Updated Equipment Inventory Records
FISCAL MONITORING Monthly Expenditure Reports by Activity Reconciled Monthly to Capture Discounts, Cost-Savings, and Consistency with Drawdown Reports Required for A- 133 Audit & Timely Submission to the Audit Clearinghouse Facilitate Title III E-Reporting
GRANTEE’S RESPONSIBILITIES Project success & financial accountability Submit annual & final performance reports Valid & reliable data Report of GPRA standards & indicators
GRANTEE’S RESPONSIBILITIES ON SITE: –Funded application & grant award –Previous audits & site visit reports –Annual Performance Reports –Project revision(s) documentation –Current budget & personnel list
COMMON AUDIT EXCEPTIONS Things that should NEVER happen: –Poor recordkeeping –Unallowable costs or activities –Missing time & effort reports –Failure to follow procurement standards –Lack of internal controls –Failure to obtain prior approval if required –Poor cash management (excessive draws)
AUDIT REQUIREMENTS Non-Federal audit IF expending $500,000 or more annually in Federal awards Mail to Federal Audit Clearinghouse OMB CIRCULAR A-133
EXPANDED AUTHORITIES (Cont.) PRE-AWARD COSTS: May be incurred up to 90 days before budget period begins NO PRIOR APPROVAL REQUIRED
EXPANDED AUTHORITIES (Cont.) PRE-AWARD COSTS OVERVIEW: –Reasonable expectation of receiving a grant –Incurred at own risk –ED funds are not available for draw down until the budget period begins –NOT for cost over-runs
EXPANDED AUTHORITIES CARRYOVER: –Unexpended funds carried over without prior approval –May be used for allowable costs within the approved scope Complete unfinished objectives “Other” activities within scope
EXPANDED AUTHORITIES (Cont.) CARRYOVER (continued): –Program Officer may require Written statement to include: –How will unexpended funds be used? –When will unexpended funds be used? –In rare cases, new funds may be reduced
PERFORMANCE MONITORING: The Routine Tracking of: Activity Inputs and Outputs Adequacy of Project Management Extent of Compliance Level of Effort Adequacy of Property Controls
MONITORING Continuous Internal Review of Data to Manage the Implementation Process EVALUATION Periodic External Review of Information to Describe Short and Long Term Outcomes and Benefits
EXTERNAL EVALUATION ENCOMPASSES BOTH FORMATIVE & SUMMATIVE METHODOLOGIES
KINDS OF EVALUATIONS FORMATIVE for improvement purposes SUMMATIVE to describe program impacts
TYPICAL FORMATIVE EVALUATION ACTIVITIES Time and Effort Reports Property Control Procedures Monthly and Quarterly Progress Reports Fund Accounting Procedures Internal Monitoring Strategies General Grant Management Procedures (Checks and Balances) Include Review of:
TYPICAL SUMMATIVE EVALUATION ACTIVITIES Annual E-Performance Reports A-133 Audit Report Findings & Follow-Up Assessment Instruments and Results, and Level of Institutional Commitment Include Review of :
PURPOSES OF EVALUATION Document Accomplishments Provide Data on Cost-Effectiveness Describe Program Effectiveness
PURPOSES (Cont.) Document Compliances with Program Regulations Ensure Agency (Donor) that Funds were used as Approved
THE EVALUATION PROCESS ENTAILS Monthly Progress Report Annual E-Performance Report Minutes of Meetings Assessment Surveys and Results Equipment Inventory Records Verification of Relevant Documentation Title III Policies and Procedures Manual
EVALUATION PROCESS FOCUS 1.What are the Actual Outcomes? 2.What were the Intended Outcomes? 3.Relationship of Actual Outcomes to CDP Priorities. 4.Relationship of Resources Used to Actual Outcomes. 5.Were there Unexpected Outcomes?
THE EXTERNAL EVALUATION PROCESS ULTIMATELY DOCUMENTS INSTITUTIONAL Accountability AND Performance AND Achievement